Around the office, I am known as a bit of a perma-bear. I have thought the market has been ahead of itself for the last several months, but that does not mean I am looking for (nor rooting for) a market collapse. I guess it stems from my cautious nature in most things. October, historically, has not been a very good month for stocks. It does not help that the month marks two of the worst market days in history—October 29, 1929, and October 19, 1987. Sadly, October 19, 1987, was my late father’s 43rd birthday, and I think he took it a little personally that the market decided to tank on his day.

Market psychology, perhaps more so than fundamentals, seems to be kicking in to start October 2014. Worries related to when the Federal Reserve will start raising interest rates, slowing growth in Europe and a potential global health crisis stemming from Ebola has investors taking profits after an impressive run in the market. Already, the “B word” (bear) is being kicked around in the financial and popular press. But you will not hear that from this perma-bear (at least not yet). While time may prove that we are in the early stages of a “B” market, let’s put things in context. The iShares Dow Jones U.S. Index ETF (IYY) is a market benchmark AAII uses for many of its model portfolios. It captures roughly 95% of the U.S. stock market, making it a better total-benchmark bogey than, say, the S&P 500, which encompasses the largest 500 U.S.-traded companies. The ETF hit an all-time-high closing price of $101.22 on September 18, 2014. In the 18 trading days following that all-time-high close, there were five single-day losses of at least 1%, including 1.98% and 2.08% losses. Many would assume that the IYY must be in the midst of a correction (a decline of at least 10% from its September high). However, they would be wrong. From its September 18 high, the IYY is down “only” 7%, through October 13, 2014.

The 2.08% decline on October 13 did generate a rather significant technical event for IYY shares: It pushed the closing price below its 200-day moving average. The big drop that day was probably caused, in part, by program trades that kicked in once the ETF fell below the moving average on an intraday basis. When securities or indexes move below their 50-day or 200-day moving average, the move is often exacerbated by program trading. You only have to look to July 31, 2014, as another example. That day, the IYY moved below its 50-day moving average on an intraday basis and ended the day down 1.84%. On October 1, the IYY fell 1.44%, the same day it violated its 100-day moving average on an intraday basis. But I digress.

The last time the IYY fell below its 200-day moving average was on November 14, 2012, when it closed at $65.58 (after losing 1.59% that day). The move was short-lived, however. Three days later, the IYY gained 1.88%, closed above its 200-day moving average, and rose another 39.7% through the close on October 13, 2014.

I guess what I am trying to say here is that it is important to put things into context, especially when panicked voices get shriller. A relatively straightforward indicator I use to judge the level of volatility in the market tracks the number days over the last six months that the market has fallen by 1% or more. The CBOE Volatility Index (VIX), the so-called market “fear gauge,” captures a lot of headlines, but I prefer the 1% down days indicator because it is easier to understand (at least for me). Looking at the number of 1% down days over the six-month period ending October 13, 2014 (125 trading days), there have been a total of eight days where the IYY has fallen by 1% or more (five of those days coming in the 14 days ending October 13). Looking back over the IYY’s entire trading history, dating back to July 19, 1999, the maximum number of 1% down days over a rolling six-month period was 51, while the smallest number of days was two. Over the period, the median number of 1% down days was 17 and the average was 19. So, when we consider the current conditions in a historical context, we are actually in a period of relative calm. There is no doubt that we are experiencing a jump in volatility: The number of 1% down days at the start of 2014 was at five. Volatility, however, is a two-way street. As investors, we probably do not mind volatility to the upside. Downside volatility is an inevitability; the key is to stay calm and let reason be your guide.

CI Market Dashboard

If you are interested in gaining a better understanding of what is going on in the market as a whole, be sure to check out the CI Market Dashboard. This collection of nine indicators covers market technicals, fundamentals, and valuation. We update them every week—typically Friday night or Saturday morning—and also include a detailed recap of the happenings in the market for that week. For what it’s worth, for the week ending October 10, the Dashboard became the most bearish in its relatively short seven-month history. Does this mark an oversold buying opportunity, or the beginning of a prolonged downward move in the market? Stay tuned to find out!

Best of the Web: Portfolio Tracking, Analysis & Optimization

This month we continue our periodic review of the “Best of the Web,” this time focusing on the top Web sites for portfolio tracking, analysis and optimization. Hareesh Jayanthi has injected some fresh perspective into this category, uncovering some gems I myself had never even heard of. Mix in some classic CI favorites, and you have a robust stable of sites to help you keep tabs on all the happenings in your investment portfolio.

Google Sheets Portfolio Tracker

Lastly, to polish off our portfolio-themed issue, Jaclyn McClellan’s Spreadsheet Corner highlights Google Sheets, a free, online spreadsheet tool from Google. While certainly not as powerful as Microsoft Excel (but considerably cheaper), these online spreadsheets are still extremely useful. Beyond explaining the functionality Google Sheets has to offer, Jackie also demonstrates their utility by creating a free portfolio tracker that you can download.